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A Spirited Combination With a Silver Lining

NEW YORK ( TheStreet) -- They come from two different worlds -- silver and spirits -- but these two "hard" assets could add some shine to your portfolio.

First, the silver. In a speech given in Indiana earlier this week, Chairman Bernanke reminded us once again the Federal Reserve will be accommodating the growth of the investment markets for a long time to come.

What Bernanke said was bold and direct, "We expect to keep the short-term interest rate at exceptionally low levels to at least mid-2015... So long as price stability is preserved, and we will take care not to raise rates prematurely."

The Fed's interest rate policy, in Bernanke's own words, will be in place "...for a considerable time after the economy strengthens." Now that's what I call "accommodating" and should help hard assets to skyrocket in the months ahead.

One of those hard assets is silver, which I believe is not only the "poor man's gold" but is an essential precious metal used in technologies as diverse as electronics and killing virus' that cause diseases.

Yes, this amazing metal has dozens of industrial uses, but when you look at a 2012 American Silver Eagle one-ounce proof coin you'll feel the main reason people buy silver is because it's the other precious metal that is an enduring symbol of value and beauty. It, like gold, is also seen as a hedge against the depreciation of paper currencies.

Since the Fed's series of momentous announcements about its massive new version of monetary easing (a.k.a. "QE3"), the price of silver, as represented by the iShares Silver Trust ETF (SLV) has soared, as the following year-to-date chart illustrates. SLV data by YCharts

One way to play the benefits of rising silver prices is to own one of the largest primary silver producers in the world. Pan American Silver (PAAS) is the largest publicly traded silver miner today and the share price still has room to run. It keeps moving higher with the price of silver because it's growing its bottom line, as the following chart illustrates how its price-per-share and free cash flow appear to be moving in tandem. PAAS data by YCharts

With its 350 million ounces of silver reserves and 2.6 million ounces of gold, things are definitely looking up at PAAS. That's partly because of its early-spring acquisition of a company called Mine-Finders, which owned the mineral rights at a mine named "Dolores", which means "sorrows" in Latin.

The Dolores mine also causes sorrows for those who weren't as smart as Pan American Silver. Once PAAS controlled Dolores it boosted both its silver reserves and gold reserves significantly, as you can read about at its informative Web site .

In fact, one of the best ways to explain what PAAS is by quoting the home page: "Pan American Silver Corp. is a Canadian silver mining company based in Vancouver, BC. The company was founded in 1994 with the intention to provide investors with the best vehicle to gain real exposure to silver."